New Zealand’s talent mismatch between the skills jobseekers have and those employers want sits at its highest level in eight years, according to the 2019 Hays Global Skills Index. Published in collaboration with Oxford Economics, the index shows that despite an existing pool of labour, employers find it harder to secure the right talent now than a year ago.
“The talent mismatch is most obvious in high-skill industries and for roles that require highly-skilled professionals, such as technology, engineering, construction and sales,” says Adam Shapley, managing director of Hays in New Zealand. “Add high labour market participation, the creation of new jobs and the automation of routine and repetitive tasks, and it’s clear that the talent imbalance will continue to exist unless employees invest in their own upskilling and employers redesign jobs and reskill displaced workers. Without such actions, the labour market will continue to struggle to provide the skills employers need.
“The shortage is also putting pressure on employers to increase their salaries,” continues Shapley, “But employers are resisting this and keeping salary increases firmly in check. This is leading to rising turnover as employees recognise that their skills are in demand and will attract a higher salary when changing jobs.”
New Zealand’s overall score of 5.5 is calculated through an analysis of equally weighted indicators, each scored out of 10, with 1 being a low pressure point and 10 being a high pressure point. These include:
- Talent mismatch: New Zealand scored 5.8, the highest since the inception of the index in 2012, suggesting there is a widening gap between the skills employers need and those available in the labour market;
- Wage pressure in high-skill industries: New Zealand scored 10.0, the highest score possible, showing that wages for jobs in high-skill industries are under extreme pressure and sector specific skill shortages (such as in engineering and technology) are acute;
- Overall wage pressure: New Zealand scored 6.1. This suggests that highly-skilled professionals are aware of the demand for their skills. Our 2019-20 Hays Salary Guide confirms that they are prioritising a pay rise, however with employers keeping salary increases subdued, a ‘tug of war’ over salaries ensues;
- Labour market participation: New Zealand scored 5.6, up from 5.4. The rate at which the participation rate is increasing is forecast to slow, which will reduce the pool of skilled labour and put pressure on employers who want to expand.